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Local and Semi-Local Economic Impacts of Dive Tourism in Bunaken National Park, North Sulawesi, Indonesia

Tyler Davis for WWF-Indonesia Marine Program, Bali Jeff Building Jl Raya Puputan 488, Renon Denpasar 80226, Indonesia Phone +62 361 231805; Fax 231803

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Local and Semi-Local Economic Impacts of Dive Tourism in Bunaken National Park, North Sulawesi, Indonesia

By Tyler Blake Davis, research assistant, Supported by SAGE and WWF Indonesia Reference Local and Semi-Local Economic Impacts of Dive Tourism in Bunaken National Park, North Sulawesi, Indonesia. Tyler Davis, 2005. Study report for WWF-Indonesia 54 pp.

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Abstract Bunaken National Park, North Sulawesi, is governed by the Bunaken National Park Management Advisory Board (BNPMAB), a co-management board formed by executive decree of the governor of North Sulawesi. However, the authority of the BNPMAB has recently been threatened by criticism in local newspapers and in park communities concerning the perceived lack of benefits for local people. In one spectacular event in January, 2004, physical violence erupted in one community to protest the authority of the park. Many accounts of the event report an intense discontent with the distribution of economic benefits from the park, not the least of which is the distribution of the entrance fee. In response to these circumstances the BNPMAB has commissioned this report on the local economic impact of tourism. This study has three objectives: to determine the economic impacts of tourism of Bunaken National Park in three locations: Bunaken Island, a tourism island, Manado, the provincial capital, and Manado Tua, a non tourism island. Primary Tools of Analysis Economic Impacts of Tourism: This research involved 1. The impacts of external (international) private investment on local economies and 2. The relative wages of employment in the nascent tourism industry. Including, but not limited to: establishing employment statistics and household size of the island villages through structured interviews; establishing tourism employment levels (formal and informal) though dive operation and home-stay interviews, boat use (frequency and type of boat), interviews of informal participants; compiling and indexing to current prices past investments from NGOs and the co-management board. Local Baseline Data Collection: Recording itemized household expenditures of six communities on two islands to compose an index of goods and services used by profiled communities. Average local expenditures were used to weigh relative impacts of primary and secondary tourism employment. Additionally, boat usage surveys were used to estimate the percentage of local workforces primarily employed in fishing. Results: Results come in two primary forms. The first is the number and distribution of jobs derived from tourism. Nearly 1100 jobs have been created by the tourism industry in and around Bunaken National Park, with percentage of the workforce employed due to tourism ranging from 83% in Siladen to 17% in Alung Banua. The second is the total economic impact of dive tourism on the local economy- a dollar figure. Adjusted for inflation the post-money multiplier impact of dive tourism on the local economy is $220,000,000 with an annual adjusted running cost impact of $30,000,000. This research concludes that dive-based tourism is a viable means of financing alternative employment in the Bunaken National Park, and may be used in conjunction with total economic value studies to create a compelling working model for sustainable future MPAs in North Sulawesi and Indonesia.

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Report Outline Abstract Article Outline 1. Introduction

1.1. Map 1.2. Geographical group breakdown

2. Methods 2.1. Dive Tourism and Homestay Operators

2.1.1. Interviews 2.1.2. Observation

2.2. BNPMAB 2.2.1. Interviews 2.2.2. Document Analysis

2.3. Informal Employment 2.3.1. Souvenir Sellers 2.3.2. Fish Suppliers For Tourism 2.3.3. Boat Builders 2.3.4. Charter Boat Operators

2.4. Baseline Data 2.4.1. Boat Usage (Employment Level) 2.4.2. Fishing Employment 2.4.3. Home Economy Survey 2.4.4. Participant Observation in Bunaken and Alung Banua

3. Baseline Economic Data

3.1. Manado 3.1.1. Population 3.1.2. Employment

3.2. Bunaken 3.2.1. Population 3.2.2. Workforce 3.2.3. Cost of Living

3.3. Manado Tua 3.3.1. Population 3.3.2. Workforce 3.3.3. Cost of Living

4. One Time Costs 4.1. Tourism Operators

4.1.1. South Manado Group 4.1.2. North Manado Group

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4.1.3. Island Group 4.1.4. Tourism Operator Total

4.2. Secondary Tourism Total One Time Costs 4.2.1. Breakdown of Destination of One Time Costs

5. Running Costs

5.1. Dive Operators 5.1.1. South Manado Group 5.1.2. North Manado Group 5.1.3. Island Group

5.2. BNPMAB 5.2.1. Employment 5.2.2. Expenditures

5.3. Secondary Employment 5.3.1. Employment 5.3.2. Expenditures (Income)

5.4. Government 5.4.1. Tax Estimates

6. Distribution Tourism Benefits 6.1. Jobs 6.2. Initial Investment 6.3. Running Costs

7. Conclusions 7.1. Island Impacts

7.1.1. Jobs 7.1.2. Wages 7.1.3. Additional Fiscal Injection

7.2. Manado and Mainland 7.2.1. Jobs 7.2.2. Additional Fiscal Injection

References Appendix A Appendix B Appendix C

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1. Introduction Bunaken National Park (BNP) is a marine protected area (MPA) covering over 89,000 hectares outside of Manado in North Sulawesi, Indonesia. Established in 1991, and having successfully created sustainable financing mechanism, a co-management board and an enforcement system, BNP is widely hailed as a successful example of conservation in international development. Additionally BNP is heralded as a rich site of biodiversity, providing habitat to at least 1000 species of coral reef fish from 175 families (BNPMAB 1996), and approximately 400 species of scleractinian hard coral representing 63 genera and 15 families (Turak and DeVantier 2003). Besides its important coral reefs, the park contains approximately 20 percent of the region’s mangrove habitat (Merrill and Davie 1996). This park is hailed internationally as an example for successful marine national parks not only for the protection of marine diversity but also for its achievements in involving local communities in policy-making and decision-making processes via its innovative co-management board and its attempts at alleviating poverty whilst conserving biodiversity. The BNPMAB has anticipated the need to fund park management activities, law enforcement and community improvement projects through the development of a diversified portfolio of sustainable financing options that includes a decentralized entrance fee system, in-kind support from the private sector, an international volunteer program, governmental budgetary support, national and international grants, a possible endowment fund and visitor centre merchandising. Following other national park sustainable-financing models and informed by research conclusions in a 1998 Willingness-to-Pay survey in TNB (Lee 2000), BNPMAB established a decentralized mandatory entrance fee system for local and international visitors to TNB in 2000. Since TNB relies on a market-based approach to conservation through its reliance on ecotourism as a sustainable financing mechanism, it is important to ensure that ecotourism will continue in the region. In order for both ecotourism and MPAs to be successful in the long-term they must be economically viable, environmentally sustainable, and enjoy support from the local communities (Wall 1997, White et.al. 1994). TNB has no doubt achieved this; however, recently articles in local newspapers have questioned the co-management board’s ability to support the local economy. There is no question that a large amount of money flows into this area as a direct result of its status as an MPA. From these economic benefits, 20% of park funds are given directly to local government institutions (Pendapatan Asli Daerah). Regional benefits are also accrued as a result of visitor purchases in local businesses, tax collected from tourism establishments, and airport tax paid upon departure. Direct benefits to local villagers are the form of employment in tourist industries (wages and benefits such as health care) and in-kind assistance such as NSWA education and scholarships programs that support poor families as well as donations of paint to churches/library books for village schools and libraries.

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Despite these benefits, the BNPMAB currently has no data on the actual benefits accrued to the region or to local park residents or the economic impact of the park on the local city of Manado. These solid figures are valuable for the BNPMAB in order to be able to contest current accusations as well as inform future policy decisions with figures that neither underestimate nor overestimate such benefits. This information will be available for distribution to the local population in an effort to create the appropriate environment acknowledged to sustain the local support necessary for continued MPA success (Buck 1995, Cato and Orbach 1978, Clay and McGoodwin 1994). 1.1 Map Finally, for the purposes of this study the groups of dive operators, homestay operators, secondary employees and BNPMAB have been broken down into three geographic groups for which information was combined to protect privacy.

Image from: http://www.north-sulawesi.org/maps/northsulawesi.gif by Michael Wijawa Dive Operators that were not available for interview or did not wish to participate are denoted by an astrix (*). The dive operators and homestay operators for each area are:

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1.2 Geographical Group Breakdown South of Manado Group: Minahasa Lagoon Eco Divers Minahasa Prima Lumba Lumba Murex Celebes Blue Banter* North of Manado Group: NDC*

Baracuda* Kikisi* Tasik Ria* Bohowo Lodge Island Group: Froggies Siladen Spa and Resort Living Colours Bastianos Nelson’s* Lorenzo I and II Cha Cha

Two Fish Sea Breeze* Daniels* Papa Boa* SDQ* Scubana* Panorama* Ocean Star MC Martha’s* Siladen Homestay I* Siladen Homestay II*

2. Methods The methods of gathering data for evaluating the impacts of tourism contain both quantitative and qualitative elements. To gather information from stakeholders as diverse as villagers involved in the informal tourism to million dollar companies requires a variety of methods tailored to the dynamics of each group. Stakeholder groups include Dive Tourism and Homestay Operators (2.1), BNPMAB (2.2), and Informal Employment (2.3). Methods for gathering baseline data on communities include interviews, questionnaires, and participant observation (2.4). Two islands were chosen for baseline data; Bunaken Island as an example of an island that has a developed tourism economy, and Manado Tua, as an island that has little to no tourism economy. Questionnaires, surveys, and interviews were conducted in each village. For Bunaken Island the three villages are: Desa Bunaken (including Kampung Kristen and Kampung Islam), Tanjung Parigi and Alang Banua. For Manado Tua the four villages are Bualo, Manado Tua, Papingdang, and Pangalingang. This section outlines methods for obtaining economic impact data by group of stakeholders, and methods for gathering baseline data by method. 2.1 Dive Tourism and Homestay Operators The primary methods of gathering data were formal interviews and data gathered from participant observation to qualify data and help extrapolate in instances of refusal to participate. 2.1.1 Interviews As reviewing accounts of private companies is a delicate affair, the first step to ensuring cooperation was to garnish support and understanding for the study. To that end the

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researcher attended meetings of both the North Sulawesi Water Sports Association (NSWA), and the Association of Local Tourism Industries (HPWLB). At these meetings the researcher presented the forms to be used and the conditions of use (Appendix A for all survey forms). Secondly, the researcher contacted each business owner in person and met to explain the purpose of the study. If the owners consented to be interviewed the researcher scheduled an appointment. Of the foreign-owned resorts the researcher successfully followed the initial meeting with a formal interview in 12 of 16 occasions (75%), and 5 of 12 occasions for local operators (42%). Once the data was collected, the researcher summarized it, and returned it to the owner for review. If the owner found inaccuracies the researcher arranged a meeting to make changes. In total the researcher conducted over 43 meetings with foreign diver operators and over 22 meetings with local owners. 2.1.2 Participant Observation In addition to the formal interview process the researcher lived in, and observed the daily running of a locally run home stay and a foreign owned dive resort. Living in a local homestay on Pantai Liang on Bunaken Island for 10 weeks, the researcher observed the running and repair costs of operation. Later, for operations that did not consent to interviews the researcher relied on notes taken from this period to estimate the expenditures of one class of locally run home stays. Additionally, the researcher lived and worked out of a foreign-owned dive resort on Pantai Pangilisang on Bunaken Island for three months while conducting research in Tanjung Parigi and Alung Banua. The experience of observing the daily operational costs of running a foreign owned dive resort, coupled with a broad knowledge of the other foreign owned dive operations added depth to the researchers ability to estimate the investment and running costs of businesses that chose not to participate in the study. 2.2 BNPMAB, Bunaken National Park Advisory Board (Dewan Pengelolaan Taman Nasional Bunaken) Methods for data collection from the BNPMAB included structured and unstructured interviews and research of financial data archives. 2.2.1 Interviews Interviews with BNPMAB staff were of two types. First, using structured interviews, in which the researcher has distinct informational goals and asks a pre-arranged series of questions, the researcher gathered data on the activities, employment histories, employment levels, and average wage levels of BNPMAB employees and subcontractors. Secondly, using semi-structured interviews, in which the researcher has distinct informational goals but allows conversation to approach topics in the natural flow of conversation, the researcher utilized the expertise of the staff to outline the structure of businesses within BNP, and to locate additional sources of investment and employment in the park. In total over 23 distinct interviews were conducted with BNPMAB staff.

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2.2.2 Document Analysis To gather data concerning the amounts and breakdowns of the spending patterns of the management board the researcher interviewed and collected data directly from the BNPMAB. The researcher collected the financial reports for the years of its operation (2001-2004) and the itemized monthly expenditures from 2004. Breaking down operational expenditures into geographical categories, establishing the residency of BNPMAB employees, and grouping conservation related expenditures enabled the researcher to determine the distribution and amount of spending since the establishment of the BNPMAB. 2.3 Informal Employment For the informal markets, or secondary employment for which no written record exists, the researcher relied on interviews and participant observation to determine levels of employment, and estimate average wage levels. Categories of employment include souvenir sellers, fishermen, boat builders, and charter boat businesses. 2.3.1 Souvenir Sellers One significant portion of informal employment consists of local women selling souvenirs on the beach. Due to the informal nature of souvenir selling no record of employment or wage levels exists. To determine the number of souvenir sellers the researcher took base data by cataloging the demographics of the sellers through 42 personal interviews during the high season in June. Over the next six months the researcher counted the number of vendors at each location a minimum of twice a month to determine trends of participation in the market. To collect data on the income of beach vendors the researcher sat and observed the frequency of sales and price levels of sales over the course of three days. The researcher indexed sales and profits to the monthly arrival of tourists to discount from unusually high levels of sale during the peak season. 2.3.2 Tourism Operation Fishermen Though infrequent, the employment of an individual fisherman to work as an independent contractor for a specific dive operation does occur. In instances when the researcher discovered such contracts, the researcher interviewed the fisherman to determine specific employment levels, and wage levels, and if possible, the dive operation owner. 2.3.3. Boat Builders Within the boat building trade there exists the niche market of tourism boat builders that have specialized and now nearly exclusively work on building and maintaining tourist boats. The researcher established the number of employees in this niche market, and average wages of boat builders on Bunaken Island. Methods included interviews and participant observation. Interviewees included the managers of each boat building group in Desa Bunaken, interviews with workers in Tanjung Parigi, and the researcher participated in building a pelang (outrigger canoe) on Pantai Liang over the course of two weeks. 2.3.4 Charter Boat Operators

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The three categories of charter boat operators include Catamaran Operators, Chartered Transportation (speed boats, and “transport” larger boats), and Snorkeling Tours. The researcher interviewed transport operators in the harbor in Manado, and on the beach of Desa Bunaken. Collected information was cross referenced with interviews from the dive operators, informants in the charter boat business, interviews with employees of the toll booth on Pantai Liang, and with local knowledge of boats to establish ownership, employment levels, and average wage. 2.4 Baseline Data In an effort to weigh the real impacts of the variety of formal and informal tourism markets the researcher had to establish baseline data against which to weigh tourism employment. The categories of inquiry were boat usage, catch, home economy surveys, and participant observation. 2.4.1 Boat Usage (Employment Level) To catalogue the employment demographics in the tourism industry the researcher conducted surveys of the usage patters of the boats in all the villages of Bunaken and Manado Tua. During one-week intervals the number and type of boats on the beach at 7am and 4pm were recorded. These times were chosen to cover morning and evening fishing expeditions. Indexed against the number of employees per boat, and the number of boats on the beach during the holy days of Sunday for Christians and Fridays for Muslims data for the number, frequency, and type of fishermen using reef resources was obtained. 2.4.2 Fishing Employment In the villages that supply the vast majority of employees on Bunaken Island, one major opportunity cost of working in tourism is working in fishing. Within the fishing community there exist three primary means of fishing. The most popular is the funae, a 12-15 man line fishing collective in which profits are split into share among the fishermen and the owner. The second is pelang fishing, where the fishermen uses an outrigger canoe fitted with a longshaft propeller or an outboard motor and are responsible for their own costs, but reaps all benefits. The third is the londe, a small paddle-operated canoe which operates above or just off the coral reef. The researcher accompanied fishermen on funae and pelang fishing expeditions and conducted interviews with fishermen who use each method. Information on costs and benefits were collected over the course over 20 distinct interviews during five months of observation; three while living in Desa Bunaken and two while living on Liang. 2.4.3 Home Economy Survey The researcher conducted week-long household expenditure surveys in all the villages of Bunaken and Manado Tua. Surveys were conducted with a minimum random sample size of 5% of households. The gathered data was used to establish the CPI for the tourism and non-tourism islands, as well as the benefits of room and board for employees that live in dive operations. Recording the daily expenditures per household of indexing

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for number of people in the household, the researcher established a benchmark for current cost of living in each village. 2.4.4 Participant Observation in Bunaken and Alung Banua Additional information was collected during a five-month period when the researcher lived in Desa Bunaken and Alung Banua. During that time the researcher conducted semi-structured and informal interviews of the villagers on topics of opportunities for employment, including discussions on average wages, socially acceptable wages, barriers to entry, non-wage benefits and opportunity cost of different types of employment. Formal interviews were conducted with the heads of each village on the islands of Bunaken and Manado Tua to gather statistics on population and demographics, and to discuss the history of investment in the park. 3. Baseline Economic Data The first step for contextual understanding of economic benefits from tourism is an accurate estimation of the current demographics and economic dynamics of the local economy. In areas of greater economic activity a marginal change has proportionally less effect than in areas of lesser economic activity; an additional ten jobs in a city of a million people has less impact than ten additional jobs in a community of one hundred households. Within in the context of BNP, baseline economic data has been established for three regions of economic activity: the city of Manado (3.1), Bunaken Island (3.2), and Manado Tua Island (3.3). As the primary driving force of the local economy, even a cursory examination of the benefits of tourism reaped by the city of Manado is helpful to gain an understanding of the possible benefits of tourism for larger local economies. The island of Manado Tua, with a traditional economy of fishing and farming was chosen as a non-tourist example to serve as a control to the island of Bunaken, an island with an entrenched tourism industry. For each region of interest the local demographics are followed by a breakdown of employment patterns and local cost of living. Local government statistics are used for the Manado and Island populations, and their accuracy must be introduced with some caveat. However, the researcher counted the total number of households for the each village on Bunaken and Manado Tua when conducting home economy surveys, and the listed government statistics appear to be accurate. Government population statistics for Manado come from the Badan Pusat Statistik (Department of Statistics). For the islands the researched interviewed each Lurah or Hukum Tua (village head) and reviewed their most recent census figures. To establish employment levels the researcher used surveys, questionnaires and personal observation to gather data.

3.1 Manado Statistics for the city of Manado are taken from the Manado Statistic Office (Badan Pusat Statistik Kota Manado) from their 2003 City of Manado in Statistics (2003 Kota Manado

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Dalam Angka). Within the city of Manado there are nine districts by which statistics for the city are broken down. 3.1.1 Population

City of Manado

District Total Population Men Women Households People Per

Household Malalayang 54,251 27,459 26,792 13,012 4.17Sario 25,600 12,923 12,677 6,226 4.11Wanea 56,675 28,460 28,215 13,056 4.34Wenang 37,678 19,285 18,393 9,125 4.19Tikala 65,600 33,080 32,520 15,583 4.21Mapanget 45,027 23,189 21,838 11,728 3.84Singkil 46,634 23,707 22,927 10,270 4.54Tuminting 49,439 25,177 24,262 10,951 4.51Bunaken 19,960 10,267 9,693 5,167 3.86Total: 400,864 203,547 197,317 95,118 4.21 3.1.2 Employment Statistics for employment are broken down by type of employment, then type of employment over a six year period.

Manado Citizens Above 10 Years of Age

Work

Unemployed

School

Government

Other

"Working" Catigory BreakdownAgriculture

Mining

Industry

Electricity, Gas and Water

Constructin

Trade

Transportation andCommunicationFinancial

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Growth per Industry in Manado 1998-2003

0

10,000

20,000

30,000

40,000

50,000

60,000

1998 1999 2000 2001 2002 2003

Agriculture

Minning

Industry

Electricty, Gas andWaterConstruction

Trade

Transport andCommunicationsFinancial

Service

There are some interesting statistics about the level of imports and exports that move through Manado. Bearing in mind that the Service sector of the economy just surpassed the Trade sector in 2003 it is interesting to see the reported total value of imports and exports. City of Manado realization of imports and exports for 2003 Tons Value ($US) Export 6,421,534,000 3,477,073 Import 5,732 383,335 source: Industry and Trade Department Office, Manado Table 8.1.1

3.2 Bunaken Within the island of Bunaken there are two districts (Kelurahan), Bunaken, and Alung Banua. Within the Kelurahan there are five sub-districts (Lingkungan) representing people from the communities of Bunaken and Tanjung Parigi. 3.2.1 Population

Bunaken Total Population

Kelurahan/ Lingkunga

Population Per Lingkungan

Men Women Heads of Household

HH Per

People Per

15

Island* n Village Household

I-1 524 290 234 112 4.68 Bunaken Christian I-2 581 310 271 105 5.53

1777

I-3 672 343 329 144 361

4.67 Bunaken Muslim 883 I-4 883 447 436 187 187 4.72 Tanjung Parigi 501 I-5 501 253 284 114 114 4.39 Alung Banua II-1 398 214 184 104 3.83

690

II-2 292 147 145 81 185

3.60 Total: 3851 3851 2004 1883 847 847 4.55

* Bunaken Kelurahan covers the lingkungan for Siladen, but it has been placed in a separate category for the purposes of this study. 3.2.2 Workforce On Bunaken Island a traditional division of labor is still dominant, with the male head of household the sole wage earner of the family, while approximately 20% of female heads of household engaged in income earning activities. Given the number of households for each community, an estimate of the number of employment seeking individuals, or workforce, may be established. Bunaken Island Employment Seeking Individuals

Kepala Keluarga

KK seeking wages

20% Female HH

seeking wage

Total wage seekers

(Workforce)

Workforce per Village

112 112 22 134 105 105 21 126 Bunaken Christian 144 144 29 173

433

Bunaken Muslim 187 187 37 224 224 Tanjung Parigi 114 114 23 137 137

104 104 21 125 Alung Banua 81 81 16 97

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Total: 847 847 169 1,016 1,016 Due to the small workforce and geographical boundaries of the islands a breakdown of wage earning activities is approachable. To estimate the level of fishing-related employment a survey of the number and type of boat on the beach was conducted over a one-week period for each community. Data was collected at 7am and at 4pm, as there are two fishing schedules. The morning data collection records people that use Funae (live bait fishing), Pajeko (purse seine), and Pelang (motorized outrigger) boats to catch fish to sell for commission-based wages. Most of the evening fishermen use pelang and londe (paddle outriggers) to catch fish for personal consumption, though some sale of fish does exist, especially for pelang fishermen.

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Collected data from the week was indexed against the traditional day of rest for each community; Sunday for Bunaken’s Christian community and Friday for Bunaken’s Muslim community. An example of the usage graphs is below, with graphs from all other communities in Appendix B.

Boat Usage Bunaken Christian Community

0

5

10

15

20

25

30

35

40

Sunday Monday Tuesday Thursday Friday Sat urday Sunday Monday

Funae

Londe

Londe Ketingting

Transport B ig

TransportM ediumTransport Small

Speed

Katamaran

Pelang Outboard

Pelang Empty

With data on the number of people working on each type of boat an estimation of the number of people employed in fishing may be extracted. Through participant observation and interview the consensus was that funaes are staffed by 10 men, 20 use a pajeko, 2 use a pelang with an outboard motor, while only one fisherman per londe and ketingting motor pelang is normal. Taking information from the graph above the following estimations of employment levels in fishing for the communities of Bunaken Island can be made. Bunaken Christian Fishing Employment Mon Tues Thurs Fri Sat Sun Mon Funae (12 per Boat) 108 120 204 204 192 0 144 Pelang Outboard (2 per Boat) 6 6 4 2 2 2 4 Pelang One Motor (1 per Boat) 2 3 7 13 0 1 5 Pelang Two Motor (1 per Boat) 6 4 4 5 4 3 2 Pelang Empty (1 per Boat) 5 6 6 6 8 3 2 Londe (1 per Boat) 6 10 7 9 9 7 9 Londe Ketingting (1 per Boat) 0 0 0 0 2 2 3 Percentage of employment by funae: 81% 81% 88% 85% 88% 0% 85% Total Fishermen Employed per day: 133 149 232 239 217 18 169 Average People Employed in Fishing per non-rest day: 190 Bunaken Islam Fishing Employment Mon Tues Thurs Fri Sat Sun Mon Pajeko (20 per Boat) 0 0 0 0 0 0 0 Pelang Outboard (2 per Boat) 0 4 6 4 2 4 6 Pelang One Motor (1 per Boat) 1 2 1 2 3 0 1 Pelang Two Motor (1 per Boat) 0 2 4 4 5 3 0 Pelang Empty (1 per Boat) 1 1 5 0 5 1 0 Londe (1 per Boat) 1 1 1 0 1 2 1 Total Fishermen Employed per day: 3 10 17 10 16 10 8

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Average People Employed in Fishing per non-rest day: 10.7 Bunaken Tanjung Parigi Fishing Employment Thurs Fri Sat Sun Mon Tues Wed Londe (1 per Boat) 0 0 3 0 1 2 3 Katamaran (2 per Boat) 0 4 0 4 0 0 0 Pajeko (20 per Boat) 0 0 0 0 0 0 0 Pelang Empty (1 per Boat) 0 1 1 1 1 1 1 Pelang One Motor (1 per Boat) 0 2 1 0 2 2 0 Total Fishermen Employed: 0 7 5 5 4 5 4 Average People Employed in Fishing per non-rest day: 5.00 Bunaken Alung Banua Fishing Employment Thurs Fri Sat Sun Mon Tues Wed Londe (1 per Boat) 4 0 3 3 1 2 1 Transport (3 per Boat) 0 0 0 0 0 3 0 Speed (1 per Boat) 0 1 0 0 0 1 0 Pelang Outboard (2 per Boat) 0 0 2 2 0 2 2 Pelang One Motor (1 per Boat) 0 1 1 2 0 1 0 Pelang Two Motor (1 per Boat) 0 0 0 1 0 0 0 Pelang Empty (1 per Boat) 2 2 4 3 2 2 0 Taxi (6 per Boat) 6 0 12 0 0 0 0 Total Fishermen/Transport Employed: 12 4 22 11 3 11 3 Average People employed in Fishing/Transport per non-rest day: 9.43 The summation of these results gives a percentage of the population working in the fishing industry.

Bunaken Bunaken Kristen

Bunaken Islam

Tanjung Parigi Alban

Population of Each Village: 1,777 883 501 690 KK Each Village: 361 187 114 185 Wage Seekers per Village (workforce): 433 224 137 222 Fishing (high employment mark) 239 17 7 22 Fishing (average) 190 11 5 10 High % of workforce 55% 8% 5% 10% Average % of workforce 44% 5% 4% 5% Percentage of Island Workforce in Fishing (high): 28% Percentage of Island Workforce in Fishing (average): 21% 3.2.3 Cost of Living For each community a household economy survey was used to establish a cost of living index. Randomly selected households recorded the type and cost of goods and services they used during a week. The goods and services were compiled into a Consumer Price Index (CPI) that weighed the importance of each good relative to the weekly expenditure.

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Relevant to this report is the average total household expenditure per village. These figures represent total cash outlays, and do not include the additional value of goods from the traditional sources, i.e. gifting fish, gathering vegetables from a garden or collecting leaves for consumption. Nevertheless, a figure representing the monthly participation level in the cash economy is a valuable tool for evaluating the relative weight of cash wages on the household level economy. Below is a summation of results of the household surveys displayed by village on Bunaken. Bunaken Village Average Per Person Per Day: 5,670Average Per Person Per Week: 39,690Household of 4.85: 192,497Household Per month: 818,110 Tanjung Parigi Average Per Person Per Day: 5,901Average Per Person Per Week: 41,307Household of 4.39 per week: 181,338Household Per month: 770,685 Alung Banua Average Per Person Per Day: 6,130Average Per Person Per Week: 42,910Household of 3.73: 160,054Household Per month: 680,231

3.3 Manado Tua Within the island of Manado Tua there are two districts (Kelurahan), Manado Tua I and Manado Tua II. Within Manado Tua I Kelurahan there are four Lingkungan representing people from the communities of Manado Tua Negeri, and Bualo. Within Manado Tua II Kelurahan there are five Lingkungan, representing the communities of Papindang and Pangalingang. 3.3.1 Population Manado Tua Total

Population Kelurahan/ Lingkunga

n

Population Per

Lingkungan

Men Women Heads of Household

HH Per

Village

People Per

Household

I-1 304 154 150 60 5.07Manado Tua Negeri 596

I-2 292 151 141 85 145

3.44I-3 237 123 114 63 3.76Bualo

523 I-4 286 153 133 86

149 3.33

Papindang 372 II-1 372 184 188 98 98 3.80II-2 297 147 150 78 3.81II-3 313 154 159 81 3.86

Pangalingang 1285

II-4 334 161 173 68

319

4.91

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II-5 341 167 174 92 3.71Total: 2776 2776 1394 1382 711 3.90 3.3.2 Workforce On Manado Tua Island a traditional division of labor between home-making and wage earning breaks cleanly along gender lines. Due to fewer wage-earning activities in the tourism industry the percentage of female heads of household earning wages is no more than 15%. Employment opportunities for women are generally limited to small shop owners, teachers, and domestic assistants for more wealthy community members. Again, given the number of households for each community, an estimate of the number of employment seeking individuals may be established.

Manado Tua Employment-Seeking Individuals Kepala

Keluarga KK seeking

wages 15% Female HH seeking

wages

Total wage seekers

(Workforce)

Workforce per Village

60 60 9 69 Manado Tua 85 85 13 98

167

63 63 9 72 Bualo 86 86 13 99

171

Papindang 98 98 15 113 113 78 78 12 90 81 81 12 93 68 68 10 78

Pangalingang

92 92 14 106

367

Total: 711 711 107 818 818 For the communities of Manado Tua the same boat analysis has been done as on Bunaken Island, resulting in the following boat usage and employment tables. Manado Tua, Bualo Fishing Employment

Morning

Fri

Sat

Sun

Mon

Tues

Wed

Thur

s

Pelang 0 (1 per boat) 28 32 0 10 26 30 0Pelang 1 (1 per boat) 0 1 1 0 0 1 2Pelang Outboard (2 per boat) 0 0 0 2 2 2 2Londe (1 per boat) 5 10 0 8 6 4 1Pajeko (20 per boat) 0 40 0 0 20 40 40Percentage Employment by Pajeko 0% 48% 0% 0% 37% 52% 89%Total Fishermen Employed: 33 83 1 20 54 77 45Average People Employed in Fishing per non-rest day: 52 Manado Tua, Manado Tua Negri Fishing Employment

20

Morning Fr

i

Sat

Sun

Mon

Tues

Wed

Thur

s

Pelang 0 (1 per boat) 33 37 0 12 16 20 36Pelang 1 (1 per boat) 0 0 2 2 1 0 0Pelang Outboard (2 per boat) 2 2 0 0 2 2 2Londe (1 per boat) 13 9 0 2 9 22 11Pajeko (20 per boat) 40 40 0 0 0 80 60Percentage Employment by Pajeko 45% 45% 0% 0% 0% 65% 55%Total Fishermen Employed: 88 88 2 16 28 124 109Average People Employed in Fishing per non-rest day: 75.5

Manado Tua, Pangalingang Fishing Employment

Morning Fr

i

Sat

Sun

Mon

Tues

Wed

Thur

s

Pelang 0 (1 per boat) 55 66 0 64 59 61Pelang 1 (1 per boat) 7 5 0 17 9 9Pelang 2 (1 per boat) 4 3 4 4 3 0Pelang Outboard (2 per boat) 2 4 0 4 4 8Londe (1 per boat) 7 5 0 17 9 9Total Fishermen Employed: 75 83 4 106 84 87Average People Employed in Fishing per non-rest day: 87 Manado Tua, Papingdan Fishing Employment

Morning Fr

i

Sat

Sun

Mon

Tues

Wed

Thur

s Pelang 0 (1 per boat) 3 0 2 4 3Londe (1 per boat) 16 0 6 9 8Pajeko (20 per boat) 40 0 0 60 40Percentage Employment by Pajeko 68% 0% 0% 82% 78%Total Fishermen Employed: 59 0 8 73 51Average People Employed in Fishing per non-rest day: 47.75 The summation of these results gives a percentage of the population working in the fishing industry.

Manado Tua Bualo Manado Tua Negri Pangalingang Papingdan

Population of Each Village: 523 596 372 1,285 KK Each Village: 149 145 98 319 Wage Seekers per Village (workforce): 171 167 113 367 Fishing (high employment mark) 83 124 106 73 Fishing (average) 52 76 87 48 High % of workforce 49% 74% 94% 20%

21

Average % of workforce 30% 46% 77% 13% Percentage of Island Workforce in Fishing (high): 47% Percentage of Island Workforce in Fishing (average): 32% 3.3.3 Cost of Living For each community a household economy survey was used to establish a cost of living index. Randomly selected households recorded the type and cost of goods and services they used during a week. The goods and services were compiled into a CPI that weighed the importance of each good relative to the weekly expenditure. Relevant to this report is the average total household expenditure per village. These figures represent total cash outlays, and do not include the additional value of goods from the traditional sources, i.e. gifting fish, gathering vegetables from a garden or collecting leaves for consumption. Nevertheless, a figure representing the monthly participation level in the cash economy is a valuable tool for evaluating the relative weight of cash wages on the household level economy. Below is a summation of results of the household surveys is displayed by village on Manado Tua. Bualo Average Per Person Per Day: 4,584Average Per Person Per Week: 32,088Household of 3.51: 112,629Household Per month: 478,673 Negeri Average Per Person Per Day: 5,381Average Per Person Per Week: 37,667Household of 4.11: 154,811Household Per month: 657,948

Pangalingang Average Person Day: 6,569Average Per Person Per Week: 45,983Household of 4.02: 184,852Household Per month: 785,620 Papingdang Average Per Person Per Day: 3,064Average Per Person Per Week: 21,448Household of 3.80: 81,502Household Per month: 346,385

4. One Time Costs The primary aim of the study is to extract contextual information pertaining to the destination of expenditures in the tourism businesses. Expenditures are broken down into one time costs and running costs (section 5). Within the one time costs tourism operators are delineated by location; South of Manado, North of Manado and the Island Group of Bunaken, and Siladen.

4.1 Tourism Operators Two barriers to accurate collection of this information exist; non-cooperative owners, and investments made in the past. For the tourism operations that chose not to participate in the study, (25% of foreign owned, and 58% of Indonesian owned) the researcher surveyed the location to establish the relative size and quality of the establishment, then indexed the location to a dive operation of similar size and quality. Whenever available the number of employees was used to weigh the index.

22

To address the change in value of investment over time two difficulties existed. One was to account for a change in the value of the Rupiah over time. The second was to account for initial investments made in a currency other than the Rupiah. To address the change in value over time the researcher compiled an index of daily exchange rates of the Rupiah to the US dollar for the entire period of tourism industry investment that was researched. Next an annual average exchange rate was calculated for each year. Then an index of inflation was taken from the Minneapolis Federal Bank to adjust the current value of dollars given the year of investment. The conversion calculation index is in Appendix C. For investments made reported in currencies other than the US dollar or the Indonesian Rupiah the researcher used a similar method to discount investment over time. The annual inter-bank exchange rate average for the two currencies was calculated, and then used with the current value index to produce investments in terms of 2005 US dollars. All dollar figures in this paper are presented in 2005 US dollars. 4.1.1 South Manado Group The South Manado Group consists of the six dive operations that operate within the southern part of BNP along with the one major dive operation in the city of Manado. South Manado Group Initial Investment:

Manado/MainlandTotal: $3,759,076

Southern Group One Time Costs

In 2005 Dollars Land Totals: 26%Building Costs Total: 33%Boat Totals 27%Government Fee Totals: 6%Car Totals: 4%Staff Training Totals: 2%Other Costs Totals: 2%

Southern Group One Time Costs

Land Totals:

Building Costs Total:

Boat Totals

Government FeeTotals:Car Totals:

Staff Training Totals:

4.1.2 North Manado Group

23

The North Manado Group consists of the five dive operations that operate within the northern part of BNP. North Manado Group Initial Investment: Manado/MainlandTotal: $2,971,186

Northern Group One Time Costs

In 2005 Dollars Land Totals: 26%Building Costs Total: 28%Boat Totals 29%Government Fee Totals: 6%Car Totals: 4%Staff Training Totals: 2%Other Costs Totals: 5%

Northern Group One Time Costs

Land Totals:

Building Costs Total:

Boat Totals

Government FeeTotals:Car Totals:

St ff T i i T t l4.3 Island Group The Island Group consists of the sixteen tourism operations that operate on the islands of Bunaken and Siladen. Island Group Initial Investment:

Bunaken &

Siladen Manado & Mainland

Total per location: $1,223,700 $2,142,151

Island Group One Time Costs

In 2005 Dollars Land Totals: 21%Building Costs Total: 46%Boat Totals 25%Government Fee Totals: 4%Car Totals: 1%Staff Training Totals: 2%

24

Island Group One Time Costs

Land Totals:

Building Costs Total:

Boat Totals

Government FeeTotals:Car Totals:

Staff Training Totals:

4.4 Tourism Operators Total Broken down by the area of expenditure the three groups of tourism operators have introduced direct foreign investment with the following breakdown of destination of expenditures. Tourism Operators Initial Investment:

Bunaken/Siladen Manado/Mainland South Manado Group $3,759,076 North Manado Group $2,971,186 Island Group $1,223,700 $2,142,151 Total per location: $1,223,700 $8,872,413

All Groups One Time

Costs In 2005 Dollars Land Totals: 25%Building Costs Total: 36%Boat Totals 27%Government Fee Totals: 5%Car Totals: 3%Staff Training Totals: 2%Other Costs Totals: 2%

25

All Groups One Time Costs

Land Totals:

Building Costs Total:

Boat Totals

Government FeeTotals:Car Totals:

Staff Training Totals:

Other Costs Totals:

4.2 Secondary Tourism One Time Costs Using information on the market price for motors, boats, water pumps, generators and maintenance tools gathered from interviews with Dive Operators allowed the researcher to create a market price index for the capitol investment of secondary tourism operators. The following spreadsheet gives the breakdown of initial investment by location and type of operator. Secondary Personnel Initial Investment Cost Breakdown

In Rp Items Boat Cost Motor Costs

Investment Per

Operator Ibu Ibu on Beach Clothing, Jewelry 200,000 Motor Repairs Tools 400,000 Boat Builders/Renovation Tools, Generators 3,500,000 Transport Renters Boat, Motors 16 Juta 15 Juta 46,000,000 Water Vendors Water Pump 3,000,000 Snorkel Tours Pelang, Motor, Gear 1.1 Juta 4 Juta 6,100,000 Charter Dive Boat Owners Boat, Motors 16 Juta 15 Juta 46,000,000 Catamaran Owners Boat, Motors 8 Juta 15 Juta 38,000,000 Speed Owners Boat, Motors 10 Juta 15 Juta 25,000,000

Secondary Tourism Initial Investment

In Rp Investment Per Operator Bunaken K. Bunaken I. Tanjung

Parigi Alung Banua Manado

Ibu Ibu on Beach 200,000 600,000 6,000,000 1,800,000 0 0 Motor Repairs 400,000 0 0 0 0 4,000,000 Boat Builders/Renovation 3,500,000 42,000,000 56,000,000 7,000,000 0 0 Transport Renters 46,000,000 0 0 0 46,000,000 368,000,000Water Vendors 3,000,000 0 3,000,000 3,000,000 0 0 Snorkel Tours 6,100,000 24,400,000 6,100,000 0 0 0

26

Charter Dive Boat Owners 46,000,000 0 138,000,000 0 0 184,000,000Catamaran Owners 38,000,000 76,000,000 456,000,000 76,000,000 0 228,000,000Speed Owners 25,000,000 0 0 0 0 75,000,000Total Rp: 143,000,000 665,100,000 87,800,000 46,000,000 859,000,000 4.2.1 Breakdown of Destination of One Time Costs

Destination of Secondary Tourism Initial Investment

Bunaken Manado/Mainland Total in Rp Rp343,500,000 1,456,900,000

Total in $US $36,350 $154,170

Secondary Employee Initial Investment

Bunaken K.

Bunaken I.

Tanjung Parigi

Alung Banua

Manado

5. Running Costs Running costs are perhaps the most relevant area of expenditure, because, as opposed to one-time costs, they are a guaranteed annual expenditure with tourism levels held as a constant. Though not quantified, it is notable that management of many larger tourism operations stressed that even through times of low tourism activities, including the demand side shocks of the Bali bombing, SARS, and the “bird flu” they retained all of their staff at normal wage levels. Running costs are presented in Rupiah and are examined in three sections: Dive Operators, BNPMAB, and Secondary Employment. Each section breaks down total expenditure by destination, then by jobs, wages, and benefits.

5.1 Dive Operators The largest proportion of running costs comes from the annual expenditures of the tourism operators. Running Costs for Dive Operators have been divided into South and North of Manado, and the Islands of BNP. 5.1.1 South Manado Group The South Manado Group consists of the six dive operations that operate within the southern part of BNP along with the one major dive operation in the city of Manado.

27

South Manado Group Running Costs: Bunaken/Siladen Manado/Mainland Total: Rp281,000,000 Rp12,945,106,667

Southern Group Running Costs

in 2004 Rp Staff Wages and Benefits 30%Communication 4%Daily Shopping 39%Capitol Structure Maintenance 17%Government Fees 4%Other 5%

Southern Group Running Costs

Staff Wages and Benifits

Communication

Daily Shopping

Capitol Structure Maintaince

Government Fees

Other

Staff demographics have been broken down by village of current residence. The vast majority of current residents of villages are originally from the village in which they currently reside, with a few examples of people marrying into a village and even fewer moving in from another village. Village of Origin for Dive Tourism Employees

Village:

Tota

l Em

ploy

ees

Bun

aken

K.

Bun

aken

I.

Mol

as

Sila

den

Tanj

ung

Parig

i A

lang

Ban

ua

Man

ado

Tua

Man

ado/

Tom

ohon

Po

po

Tana

wan

ko

Mok

upa

Oth

er

South Manado Group 223 1 0 8 9 0 0 0 156 7 30 7 5 In an effort to simplify a representation of the variety of wage levels for current uses the wages have been averaged for all employees. Running costs include the wages and benefits for all employees. Benefits may include health insurance, retirement, severance,

28

Christmas or Adul Fitri bonus, housing, meals, marriage bonus, death bonus, and newborn bonus. Mainland South Expenditures on Staff

Total Staff Average Monthly Wage + Benefits

Wage and Benefits

Number of Staff Housed

Housing Costs Meals Cost of Meals

Monthly Expenditure

in Rp 224 1,383,857 309,983,997 53 15,900,000 14,880 66,960,000

Annual Expenditure 3,719,807,964 190,800,000 178,560 803,520,000 Total Annual Expenditure: Rp 4,714,127,964 5.1.2 North Manado Group The North Manado Group consists of the five dive operations that operate within the northern part of BNP. North Manado Group Running Costs: Manado/Mainland Total: Rp7,388,755,333

Northern Group Running Costs

in 2004 Rp Staff Wages and Benefits 33%Communication 4%Daily Shopping 36%Capitol Structure Maintenance 14%Government Fees 8%Other 4%

29

Northern Group Running CostsStaff Wages and Benifits

Communication

Daily Shopping

Capitol StructureMaintainceGovernment Fees

Other

Village of Origin for Dive Tourism Employees

Village:

Tota

l Em

ploy

ees

Bun

aken

K.

Bun

aken

I.

Mol

as

Sila

den

Tanj

ung

Parig

i A

lang

Ban

ua

Man

ado

Tua

Man

ado/

Tom

ohon

Popo

Ta

naw

anko

M

okup

a O

ther

North Manado Group 136 0 0 7 0 0 0 0 75 0 0 0 54 Mainland North Expenditures on Staff

Total Staff Average Monthly Wage + Benefits

Wage and Benefits

Number of Staff Housed

Housing Costs Meals Cost of Meals

Monthly Expenditure

in Rp 136 1,470,882 200,040,000 46 13,800,000 8,280 37,260,000

Annual Expenditure 2,400,480,000 165,600,000 99,360 447,120,000 Total Annual Expenditure: Rp 3,013,200,000 5.1.3 Island Group The Island Group consists of the sixteen tourism operations that operate within the island of Bunaken and Siladen. Island Group Running Costs: Bunaken/Siladen Manado/Mainland Total: Rp5,410,032,516 Rp11,050,352,406

30

Island Group Running Costs

in 2004 Rp Staff Wages and Benefits 31%Communication 4%Daily Shopping 43%Capitol Structure Maintenance 7%Government Fees 3%Other 12%

Island Group Running Costs

Staff Wages and Benifits

Communication

Daily Shopping

Capitol StructureMaintainceGovernment Fees

Other

Village of Origin for Dive Tourism Employees

Village:

Tota

l Em

ploy

ees

Bun

aken

K.

Bun

aken

I.

Mol

as

Sila

den

Tanj

ung

Parig

i A

lang

Ban

ua

Man

ado

Tua

Man

ado/

Tom

ohon

Popo

Ta

naw

anko

M

okup

a O

ther

Island Group 377 94 19 0 75 65 28 2 94 0 0 0 0 Island Group Expenditures on Staff

Total Staff Average Monthly Wage + Benifts

Wage and Beniftis Housing Housing

Costs Meals Cost of Meals

Monthly Expenditure

in Rp 376 954,555 358,912,577 145 43,525,000 27,459 123,563,250

31

Annual Expenditure 4,306,950,924 522,300,000 329,508 1,482,759,000 Total Annual Expenditure: Rp 6,312,009,924 5.2 BNPMAB The BNPMAB manages BNP using funds that come from the park entrance fee, and from outside donations and grants. Over the years money has come in from abroad from sustainable tourism efforts and multiuse conservations efforts. BNPMAB funds are distributed through a variety of mechanisms to the communities of the park and surrounding areas, including the three primary areas of inquiry: Manado and South of Manado, North of Manado and the Islands of Bunaken and Manado Tua. Mechanisms of resource allocation include direct employment, direct transfer of funds, bonuses, and financial support for community organizations. 5.2.1 Employment As the seat of the BNPMAB Office, the city of Manado reaps substantial benefits from employment of people that are involved in BNP management. Of the many types of employment the primary categories and related annual expenditures are following: BNPMAB Employees by Job and Location Manado Area Bunaken Mantehage

South Manado North Bunaken

ChristianBunaken

Islam Tanjung Parigi

Alung Banua

Office Workers 7 Field Staff 3 Patroli 18 10 8 5 5 5 15 PolAir 2 4 Jagawana 2 4 2 2 PolSec 2 Boat Staff 1 1 2 1 1 1 Beach Cleaners 5 6 Loket 2 1 2 Pokja 1 Total: 23 18 13 17 6 12 9 20 5.2.2 Expenditures Expense Summary for 2004 (in millions of Rp) Source: BNPMAB 2004 Financial Report

32

Exe

cutiv

e S

ecre

tary

Gov

ernm

ent

20%

Villa

ge

Dev

elop

men

t

Foru

m a

nd

Cap

acity

D

evel

opm

ent

Bea

ch

Cle

anin

g C

rew

Loke

t E

mpl

oyee

s

Man

teha

ge

Pat

rol

Bun

aken

P

atro

l

Nor

th P

atro

l

Sou

ther

n P

atro

l

812 286 172 41 69 124 74 272 70 185Percentage of total Budget: 2105 million 38.6% 13.6% 8.2% 1.9% 3.3% 5.9% 3.5% 12.9% 3.3% 8.8%Percentage of Pin Revenue: 1330 million 61.1% 21.5% 12.9% 3.1% 5.2% 9.3% 5.6% 20.5% 5.3% 13.9%

Dewan Spending Breakdown 2004Executive Secretary

Government 20%

Pin Incentive

VIllage Development

Forum and CapacityDevelopmentBeach Cleaning Crew

Loket Employees

Mantahage Patrol

Bunaken Patrol

North Patrol

Southern Patrol

The destination of expenditures from the BNPMAB are broken down by geographical location. In instances of multiple wage earners from different locations where the wage level is not know per individual the wage has been averaged. BNPMAB Running Costs: Bunaken/Siladen Manado/Mainlnad Other Islands Total: Rp481,000,000 Rp1,472,000,000 Rp159,000,000 5.3 Secondary Employment Within the group of Secondary Employment, figures on average wages and benefits were not available. For that reason the number and breakdown of types of jobs along with the village of origin for the employee are presented alone. Assumptions about wages must be given within a spectrum of high and low wage estimates. Total Secondary Employees: Secondary Personnel Total Bunaken K. Bunaken I. Tanjung Parigi Alban Manado

33

Ibu Ibu on the Beach 42 3 30 9 0 0 Motor Repairs 10 0 0 0 0 10 Boat Builders/Renovation 30 12 16 2 0 0 Transport Renters 9 0 0 0 1 8 Water Vendors 2 0 1 1 0 0 Snorkel Tours 5 4 1 0 0 0 Charter Dive Boat Owners 7 0 3 0 0 4 Charter Dive Boat Staff 14 0 6 0 0 8 Catamaran Employees 44 4 24 4 0 12 Catamaran Owners 22 2 12 2 0 6 Speed Owners 3 0 0 0 0 3 Speed Staff 6 0 0 0 0 6 Total: 194 25 93 18 1 57 Percentage of Total: 12.89% 47.94% 9.28% 0.52% 29.38% 5.3.2 Expenditures (Incomes) Secondary Personal Monthly Wage Estimates Total Bunaken K. Bunaken I. Tanjung Parigi Alban Manado Owners 32 2 15 2 0 13 High Estimate (3 Million) 96,000,000 6,000,000 45,000,000 6,000,000 0 39,000,000Low Estimate (2 Million) 64,000,000 4,000,000 30,000,000 4,000,000 0 26,000,000 Employees 162 23 78 16 1 44 High Estimate (800,000) 129,600,000 18,400,000 62,400,000 12,800,000 800,000 35,200,000Low Estimate (500,000) 81,000,000 11,500,000 39,000,000 8,000,000 500,000 22,000,000 High Totals Monthly 225,600,000 24,400,000 107,400,000 18,800,000 800,000 74,200,000Low Totals Monthly 145,000,000 15,500,000 69,000,000 12,000,000 500,000 48,000,000 High Total Annual 2,707,200,000 292,800,000 1,288,800,000 225,600,000 9,600,000 890,400,000Low Total Annual 1,740,000,000 186,000,000 828,000,000 144,000,000 6,000,000 576,000,000 Secondary Employees Annual Expenditure Destination Bunaken/Siladen Manado/Mainland Total in Rp: 1,490,400,000 733,200,000

34

Secondary Employees Income by Destiation

Bunaken K.

Bunaken I.

Tanjung Parigi

Alban

Manado

5.4 Government In addition to the incentive for the government given from the entrance pin there are additional revenues from other forms of tax. The immigration fees and business licenses have been introduced in the running costs of Dive Operations. Another source of revenue for the local government is the visa fee collected at the airport, which is estimated below. There remain the more difficult to quantify hotel and restaurant taxes which are only estimated at a conservative Rp50,000 per person. 5.4.1 Tax Estimates Tourist Taxes Estimates Percentage of Tourists For 10,000 Tourists 25$ Visa Fee (Rp 230,000) 90% 2,070,000,00020,000 Domestic Airport Tax 40% 80,000,00075,000 International Airport Tax 60% 450,000,000Hotel and Restaurant Tax of Rp 50,000 100% 500,000,000BNPMAB 20% Incentive 286,000,000NSWA Tax Expenditures 1,665,000,000Conservative Total Rp 5,051,000,000 6. Distribution of Tourism Benefits Perhaps the most interesting question pursued in this report is the distribution of dive-tourism related jobs, wages, and benefits across the spectrum of local economies. The distribution follows from the Running Costs (section 5) by taking lump sum expenditures and evaluating their local destinations. Distribution analysis is broken down in the following categories: Tourism, BNPMAB and Government. Each category examines jobs, wages and benefits. 6.1 Jobs Total and Percentage Employment in Dive Industry, Secondary Tourism, and DPTNB

35

Location Total: Bunaken K.

Bunaken I.

Tanjung Parigi

Alung Banua Siladen Manado

Tua Manado / Mainland

Workforce 443 224 137 222 101 818 157,654

Primary Tourism Employment 736 95 19 65 28 84 2 443Secondary Tourism Employment 194 25 93 18 1 57BMPMAB Employees 133 17 6 12 9 5 10 74 Percentage 30.93% 52.68% 69.34% 17.12% 88.12% 1.47% 0.36%

Using average wage levels for employees from Primary, Secondary and BNPMAB and annual expenditures for the Dive Operations that go the villages on Bunaken the following estimation of the annual total expenditures per villages is calculated.

BNPMAB Total Spending Per Village on Bunaken

Bunaken Christian

Bunaken Islam

Tanjung Parigi

Alung Banua

Staff Total Patrol 272,000,000 94,608,696 59,130,435 59,130,435 59,130,435 Boat Staff 35,428,572 17,714,286 8,857,143 0 8,857,143 Beach Cleaners 69,000,000 31,363,635 0 37,636,362 0 Pin Sales (Loket) 62,000,000 24,800,000 0 12,400,000 24,800,000 Pokja 12,000,000

Projects Forum and Capacity Development

41 Million total all Villages 1,366,667 1,366,667 1,366,667 1,366,667

Village Development 172 Million total all

Villages 573,333 573,333 573,333 573,333Total Rp: 458,188,570 170,426,617 69,927,578 111,106,797 106,727,578

6.2 Initial Investment Taking the total from primary and secondary initial investments give the following:

Total Initial Investment from Dive Operators and Secondary Tourism Bunaken/Siladen Manado/Mainland

Primary Tourism 11,502,780,000 83,400,682,200Secondary Tourism 343,500,000 1,456,900,000 Total Rp Rp11,846,280,000 Rp84,857,582,200

36

Total $US (Rp 9400 to $1) $1,260,243 $9,027,402 Using the reserve ratio for banks in Indonesia, 15%, allows one to use the Money Multiplier to calculate the total realized impact on a local economy: Initial Investment * 1/(Reserve Ratio) = Total Economic Impact $10,236,631 * 1/(.15) = $68,577,540 6.3 Running Costs Taking the total from primary and secondary tourism, BNPMAB receipts and Government Tax receipts gives the following:

Total Running Expenditures from Dive Operators, Secondary Tourism, BNPMAB and Government Funded by Dive Tourism

Bunaken/Siladen Manado/Tomohon Primary Tourism 5,765,389,008 31,568,212,470Secondary Tourism 1,490,400,000 733,200,000BNPMAB 481,000,000 1,631,000,000Government Tax Receipts 505,100,000 Total Rp Rp7,736,789,008 Rp34,437,512,470 Total $US (Rp 9400 to $1) $823,063 $3,663,565

Using the reserve ratio for banks in Indonesia, 15%, allows one to use the Money Multiplier to calculate the total realized impact on a local economy: Running Cost * 1/(Reserve Ratio) = Total Economic Impact per Year $4,486,628* 1/(.15) = $29,910,853 7. Conclusions Conclusions from this study may be broken down into two fields: the impact of dive tourism on the islands of Manado Tua, Bunaken, and Siladen, and the impact of tourism on the economy of the larger city Manado. 7.1 Island Impact Looking first at the three islands of Manado Tua, Bunaken and Siladen the differences in the penetration of tourism is remarkable. Islands that have tourism operators have experienced massive shifts in employment demographics, with the tourism service economy the primary driving force in many communities. The three most interesting results of this study concern jobs, wages and total foreign expenditures. 7.1.1 Jobs

37

On the two islands of Bunaken and Siladen tourism has replaced traditional sources of employment for the majority of the workforce in Siladen (83%), Tanjung Parigi (69%), and Bunaken’s Muslim community (53%). Interestingly enough, within Desa Bunaken the Muslim community holds a disproportionate number of the secondary employment jobs, 48%, while only comprising 22% of the total island workforce. Though not the majority of the workforce, a compelling percentage of the Desa Bunaken Christian community works in tourism as well. The lone village that has relatively few members in the tourism workforce is Alung Banua. Even there 17% of the workforce in a single sector is a commanding source of employment. A remarkable contrast to Bunaken and Siladen is the Island of Manado Tua. Though recently construction on a homestay has begun, the percentage of the total workforce engaged in tourism at less than 1% pales in comparison with Bunaken and Siladen. Not surprisingly the employment patters on Manado Tua show a greater reliance on resource extraction in the form of deep water and coral fishing. The percentage of the Manado Tua workforce engaged in fishing has been recorded as high as 47% on some days, while the high mark for Bunaken is 28%. Additionally it should be noted that the overwhelming majority of fishing employment (at times 88% in Bunaken’s Christian community) comes from the off shore Funae. For conservationists the conclusions about a shift of the dependence on fishing to non-extractive means of employment are undeniable, while for economist the benefits of a diverse and sustainable economy are commendable. 7.1.2 Wages For the communities engaged in tourism there are substantial financial benefits. In addition to a steady wage, the number and quality of benefits in comparison with the cost of living suggest a great deal of expendable income. Results taken from the home economy surveys suggest a high cost of living of Rp 800,000 per month per household in Bunaken’s Christian community, while wage and benefit compilations from the island based dive industry show expenditures on staff at an average of Rp 950,000 per month before calculating additional benefits of food, and housing. For a family that is not investing in structural improvements the conclusions are clear; wages from primary tourism employment are above the cost of living i.e. a living wage. 7.1.3 Additional Fiscal Injection Another way of looking at the impacts of dive tourism on the local economies of the islands comes under the heading of total foreign expenditure, or foreign fiscal injection. Here a summation of the initial and annual expenditures for Bunaken and Siladen from dive tourism compared side by side with Manado Tua reveals the weight of the economic impact. Taking data from above, the total initial expenditure on the islands of Bunaken and Siladen from primary and secondary tourism were on the order of $1,567,200 adjusted 2005 dollars. The same data reveals no initial investment of note for Manado Tua. Here

38

the cause is apparent. There are over 20 dive operations or homestays on Bunaken and Siladen, and only one under construction on Manado Tua. Secondly, the annual income and expenditures from dive operations, secondary tourism operations and BNPMAB sum to $823,000 adjusted 2005 dollars. The sum for Manado Tua, with sources of tourism money coming from two primary employees and 10 secondary employees is not within a factor of one thousand. 7.2 Manado and Mainland Looking at the economic impacts of dive tourism on the larger economy of the city of Manado the penetration of tourism is still remarkable, though a smaller percent of the total economy. As seen in the Manado Jobs section (3.1.2) the service sector has overtaken trade in recent years to become the single largest sector of the Manado economy. Without additional data about the Manado economy it is impossible to determine what portion of that comes from dive tourism, however, given the fact that the majority of dive operations have opened in the last six years, a positive relationship between dive tourism and Manado growth is certain. It merely remains to outline known relationships. 7.2.1 Jobs Clearly, the percentage of the workforce in dive tourism is much lower in Manado than the island economies; however, indirect job creation is much greater for two reasons. First, included in this study were only the dive operations, not the hotels and restaurants that support and are supported by them. With ten substantial hotels and dozens of restaurants serving dive operation clients many jobs are undercounted as dive tourism jobs. Additionally, annual non-wage expenditures for dive operations are nearly $4,000,000 adjusted 2005 dollars or about Rp 4,000,000,000 per year. Those expenditures for running costs at grocery stores, fuel stations, cement factories, hardware stores, furniture stores and the like also create and sustain jobs. Once these additional effects are taken into consideration the real number of jobs created by dive tourism is in excess of the 1,063 jobs on the islands and mainland presented here. The results of this study are not pointless; they are merely base, a starting point for estimating wider impacts. 7.2.2 Additional Fiscal Injection In addition to the jobs are the initial investments of $9,000,000 adjusted 2005 dollars. As shown with the money multiplier (section 6.2) the real impact on an economy of such an investment is on the order of $60,000,000. Though there is no non-tourism city to use as a foil, as was the case with Bunaken and Manado Tua, a similar discrepancy in economic impact follows. Overall the impact of dive tourism on the economies of Manado and the island is dramatic and positive. With over a thousand identifiable jobs created, an average wage well above the cost of living, impressive foreign investment, and a constant source of tax revenue, dive tourism is a sustainable alternative source of income and employment

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capable of supporting hundreds of families, and a dynamic component of a diverse economy. References cited Belsky, J. 1992. Livelihood Strategies and Marine Resource Use among Residents of Bunaken National Park, North Sulawesi: Recommendations for Local Involvement in Park Management. Report No. 14. Office of Agro-Enterprise and Environment USAID – Jakarta. Buck, E.H. 1995. Social aspects of federal fishery management. Washington, D.C.: Congressional research service. Library of Congress. CRS report. 95-553 ENR. Cato, J. and M. Orbach. 1978. Social and Economic Aspects of Fisheries Management. Charleston, SC: South Atlantic Fisheries Management Council. Clay and McGoodwin. 1994. Utilizing social sciences in fisheries management. Paper presented to the annual meeting of the International Council for the exploration of the sea in Morocco. July. Erdmann M.V., P.R. Merrill, M. Mongdong, I. Arsyad, Z. Harahap, R. Pangalila, R. Elverawati, and P. Baworo. 2004. Building effective co-management systems for decentralized protected areas management in Indonesia: Bunaken National Park Case Study. Jakarta, Indonesia. IUCN (The World Conservation Union). 1988. Resolution 17.38 of the 17th General Assembly of the IUCN. Gland, Switzerland and Cambridge, UK: IUCN. Kelleher, G. 1999. Guidelines for Marine Protected Areas. Gland, Switzerland and Cambridge, UK: IUCN (The World Conservation Union). Lee, V. J. 2000. Assessing Ecotourism’s Abilities to Generate Community Benefits. Unpublished Thesis. University of Waterloo, Canada. LeFranchi, C. 1999. What is the role of tourism in a decentralized provincial economy? NRM/EPIQ. Manado, Indonesia. Merrill R. and J. Davie. 1996. The sustainable management of Bunaken National Park’s mangroves. NRMP/USAID. NRMP. 1996. Economic Value of Fisheries to the Residents of Bunaken National Marine Park. Unpublished USAID paper. Manado, Indonesia. Rumate, V., S.E. Tewal, and O. Niode. 1999. Consultancy report for NRM. Fak. Ekonomi, UNSRAT, Jurusan Studi Pembangunan.

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Salm, R.V., J. Clark, and E. Siirila. 2000. Marine and Coastal Protected Areas: A Guide for Planners and Managers. Washington, DC: IUCN – The World Conservation Union. Sofa, F. In press. Coastal Management Projects in Indonesia 1987-1998. Proyek Pesisir Working Paper. Coastal Resources Center, University of Rhode Island. Turak, E. and L. DeVantier. 2003. Reef building corals of Bunaken National Park, North Sulawesi, Indonesia: Rapid ecological assessment of biodiversity and status. Report to the International Ocean Institute Regional Center for Australia and the WesternPacific. USAID home page. Accessed July 2004. http://www.nrm.or.id/ Wall, G. 1997. Is ecotourism sustainable? Environmental Management. 21(4): 483-491. White, A.T., L.Z. Hale, Y. Renard, and L. Cortesi (Eds.). 1994. Collaborative and Community-Based Management of Coral Reefs: Lessons from Experience. Connecticut: Kumarian Press.

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Appendix A Forms Used Dive Operation Survey Form

Survey Number__________________

Place____________________ Name of Interviewer____________________

You are being asked to participate in a survey on the economic impacts of Bunaken National Park on local communities. This questionnaire aims to elicit economic information about the number of jobs, the amount of money, the number of persons housed and the number of additional resources or projects directed to local communities as a result of being in the park. The goal of this survey is not to estimate profitability, inquire about vacancy rates, or to otherwise probe private business concerns. You will notice no questions about specific salaries or occupancy. Effort has been made to get general numbers and estimates to protect the privacy of the business community. Your name and information will be detached from this survey and all numbers will be summed with other local businesses to keep the information of individuals confidential. Results of this survey will be used in community meetings to address actual economic benefits to local communities. May I interview you?

Questions for Bungalow Owners and Dive Operators: One Time Expenditures Manado Bunaken: Year Item Capital Labor Land Purchases Rentals Building Costs Bungalows Furnishings Office Building Furnishings Kitchen Furnishings Equipment Shop Furnishings Staff Houses Furnishings Other Water infrastructure Sewage

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infrastructure Boats Number of Boats Wood Labor Motors Other Government Fees (Manado) Initial Residency Papers Initial Business license "Envelopes" (Island) Initial Residency Papers Initial Business license "Envelopes" Staff Training Dive masters Severance Other Vehicles Vans and Trucks Power Connection Hardwire "envelopes" PLN Other Expenses

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Running Costs Month Year totals for:

Year Item Bunaken Manado Staff Wages School Uniforms and Fees Medical Care/Insurance Dive Certification Updates Uniforms Rain Gear Weddings and Funerals Subcontract Work Other Capital structure Boat Repair Paint Hull Maintenance Other Motor Repair and Parts Building Repair Capitol Labor Daily Shopping Fluids Diesel Gasoline Oil Normal Water Aqua Solar Kerosene Other Food for Staff and Guests Fish Fruits Vegetables Cookies Rice Coffee/Sugar/Tea Cooking Oil Other Staff Total: Food for Guests

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Community Donation Sumbangan Church Donations Miscellaneous Other Communications Costs Land Line Internet Cell Phones Other Transportation Costs Cars to Airport Cars to Other Locations Government Taxes Manado Business Tax

Foreign Person Tax

"Envelopes" Bunaken Business Tax

Foreign Person Tax

"Envelopes" Other Expenses

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Staff Demographics Number of Staff: Manado Tomohon Bunaken Siladen

Manado Tua

Mantahage Nain Total:

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Boat Survey Form Tanggal Recorded ( )

Desa

Jam

Laut Besar Sedang Kecil

Macam Berapa

Pelang 0

Pelang 1

Pelang 2

Pelang Tempel

Londe

Londe Ketingting

Funae

Katamaran

Pajeko

Taxi

Transport Besar Transport Sedang

Transport Kecil

Sped

Bolotu

Perbedaan

Perbedaan

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Home Economy Survey Nama Recorded ( )Desa Tanggal Berapa Orang di Rumah Tangga? Berapa Nelayan di Ruman Tangga? Mancing dengan Alat Apa?

Mancing Hari Apa?

Minggu Senin Selasa Rabu Kamis Jumaat Sabtu

Hari dan Tanggal Barang Barang Berapa Harga - Pinjam - Dari Keluarga - Cari

Sendiri

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Appendix B Boat Usage Survey Results

49

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Appendix C Conversion Calculator Consumer Price Index, 1980-200

CPI-U Base year is chained; 1982-1984 = 100

Annual Percent Change Year Annual Average

(Rate of Inflation)

1981 90.9 10.3 1982 96.5 6.2 1983 99.6 3.2 1984 103.9 4.3 1985 107.6 3.6 1986 109.6 1.9 1987 113.6 3.6 1988 118.3 4.1 1989 124 4.8 1990 130.7 5.4 1991 136.2 4.2 1992 140.3 3 1993 144.5 3 1994 148.2 2.6 1995 152.4 2.8 1996 156.9 2.9 1997 160.5 2.3 1998 163 1.6 1999 166.6 2.2 2000 172.2 3.4 2001 177 2.8 2002 179.9 1.6 2003 184 2.3 2004 188.9 2.7 2005* 195.3 3.4

*An estimate for 2005 is based on the change in the CPI from fourth quarter 2003 to fourth quarter 2004.